Elon Musk and OpenAI’s CEO, Sam Altman, are currently engaged in a public disagreement regarding the Stargate AI infrastructure initiative endorsed by former President Donald Trump, marking the continuation of their ongoing rivalry that initially emerged at OpenAI’s board level. This tension has raised questions about Musk’s standing with the new administration.
During a recent announcement, Trump highlighted a collaborative venture that could see as much as $500 billion invested through a partnership including OpenAI, Oracle, and SoftBank. The Stargate initiative aims to establish necessary data centers and energy production capabilities to further the advancement of rapidly developing AI technologies. Trump framed this investment as a strong indication of confidence in America’s capabilities under his presidency, suggesting that private contributions could initially amount to $100 billion and potentially increase to five times that figure.
However, Musk, who has been an advisor to Trump and has played a notable role in his campaign, responded critically, disputing the financial viability of the investment. Through his social media platform X, Musk questioned the authenticity of the funding, asserting that SoftBank had secured less than $10 billion, a claim he stated he had verified from reliable sources. In reaction, Altman refuted Musk’s comments and extended an invitation for Musk to visit the Texas site that is already under construction for the Stargate project. Altman emphasized the significance of the initiative for the country, suggesting that while it may not align with Musk’s corporate interests, his new role should prioritize national benefits.
The Stargate conflict is rooted in a larger feud between Musk and Altman that began with disagreements over leadership roles at OpenAI, which both men were instrumental in founding. After investing in OpenAI and serving on its board, Musk filed a lawsuit against the organization last year, accusing it of straying from its original mission of operating as a nonprofit focused on public benefit in favor of profit-making efforts. Musk has intensified his legal battle with new allegations and is seeking a judicial order to prevent OpenAI from fully transitioning to a for-profit entity, with a court hearing scheduled for February in California.
Last year, Musk launched xAI, a rival initiative focused on artificial intelligence, which is developing its own expansive data center in Memphis, Tennessee. He has claimed that his new venture is struggling against the unfair competitive edge that OpenAI enjoys through its partnership with Microsoft, which provides the immense computational power necessary for constructing advanced AI models such as ChatGPT.
The Stargate project had apparently been in the pipeline before Trump’s announcement, with early reports by a tech news outlet revealing details about OpenAI’s data center plans dating back to March 2024. Additionally, Crusoe Energy Systems declared in July that it was constructing a specially designed AI data center in Abilene, Texas, backed by a substantial investment, although specific financial backers were not disclosed at that time. Both companies involved have acknowledged the high electricity demands associated with AI technology, stating that their facility will be powered by renewable energy sources, including nearby solar farms, to minimize costs and maximize sustainability. Abilene Mayor Weldon Hurt indicated that construction had begun nine months prior, noting that the scale of the project exceeded initial expectations.
According to Oracle co-founder Larry Ellison, the Abilene project serves as the initial stage of a planned expansion, with potentially ten data center buildings planned to be constructed, which may grow to twenty in total. Mayor Hurt highlighted the region’s diverse energy resources, including solar, oil, gas, and some of the largest wind farms globally. However, Trump has recently expressed resistance towards wind energy projects, temporarily suspending approvals for wind initiatives on federal lands. Hurt expressed enthusiasm for the opportunities the Stargate project brings to Abilene, emphasizing its importance in making the town significant within the energy market.
Notably absent from Trump’s press conference regarding the Stargate initiative was Microsoft, a longstanding financial supporter of OpenAI that has invested heavily in its data infrastructure. Microsoft acknowledged its investment in the Stargate project but clarified that its partnership with OpenAI would adapt to support additional research and model training infrastructure. In a subsequent interview, Microsoft CEO Satya Nadella addressed Musk’s concerns about the Stargate investment, focusing instead on Microsoft’s broader commitment of $80 billion to enhance its global AI infrastructure, including a $50 billion allocation for projects within the U.S. Nadella expressed confidence in this initiative, humorously stating, “I’m good for my $80 billion.”
